The New Norm after COVID-19?

The New Norm after COVID-19?

Everyone I speak with on the topic of COVID-19 says they hope everything goes back to normal sooner rather than later. It’s hard to disagree with that.

However, it does make me question the ‘Norm’. Are we going to return to the ‘Norm’? Will everything simply go back to how it was? Or will there be a backwash of change - socially, economically, politically and culturally?

What we find ourselves in the epicentre of is MASSIVE. It’s literally affecting everyone, one way or another. Therefore, it can be debated that it will be as impactful as World War II! 

In truth, the COVID-19 will have affected MORE people than WWII, due to population growth and the fact that it has genuinely affected the whole world. 

Therefore, I believe it’s prudent to get on the front foot and see what we can learn from history. So, what changed in society after WWII and how does it compare to this current crisis?

World War II changes

Looking beyond the tragic impact of destruction, death and dislocation, what other short-term and long-term impacts did WWII have on those nations involved?

Baby Boom

This was the result of the returning veterans and coming out from the great depression. It’s associated with economic growth, thereafter, so continued into the ‘60s, when the ‘baby-bust’ happened. It was significant growth: 78.3 million Americans were born during this period alone.

Rationing

Rationing was a means of ensuring the fair distribution of food and commodities when they were scarce. It began with petrol after the start of WWII, and later included goods such as butter, sugar and bacon. Eventually, most foods were covered by the rationing system, with the exception of fruit and vegetables. Rationing helped to change attitudes - the fact that everyone was restricted to buying a certain amount of goods, created a sense of sharing and cooperation in Britain. It was also accepted that the Government was more involved in people’s health and food intake.

Trade agreements 

There was a sudden rise in post war nationalism. This resulted in ‘buy from home’ preferences with spending. At the same time, economic organisations like the International Monetary Fund (IMF) and the General Agreement on Tariffs and Trade (today’s World Trade Organisation – WTO) were created to help open markets and avoid a worldwide depression, like the one that helped set the stage for WWII.

Social levelling 

There was increased state welfare throughout Western Europe. A certain standard of living and attaining economic stability was at the forefront of all European politics. In the UK, for example, the Beveridge Report of 1942 had already laid the groundwork for the welfare state. This investigated the reasons why individuals were not able to ‘better’ themselves. It looked at five major areas:

?             want (caused by poverty)

?             ignorance (caused by a lack of education)

?             squalor (caused by poor housing)

?             idleness (caused by a lack of jobs, or the ability to gain employment)

?             disease (caused by inadequate health care provision)

This resulted in the creation of the ever present and changing welfare state after. It was set up as:

?             comprehensive – cover all problems relating to poverty, from birth to death

?             universal – available to all

?             contributory – paid into from wages

?             non-means tested – available to all, even if unable to pay

?             compulsory – all workers were to contribute

Workplace

There was a serious shortage of skills and men after the war. This was the catalyst for gender diversity in the workplace. For many women, the war was a liberating experience – working in government offices, in fields and factories. This was the beginning of change in the workplace due to necessity as woman ‘covered’ the essential male roles in their absence. Obviously, it took a lot longer for parity and acceptance of capabilities.

Spending increased 

Consummation snowballed as the western world avidly consumed products like cars and washing machines. European societies, it has been argued, became part of an "irresistible empire" in which American consumerism and popular culture were triumphant at the expense of native national cultures. Tourism accelerated the process too, although, perversely, in many instances, local cultures adapted to tourists’ needs, thus destroying what visitors had come to see. 

Community Culture

The constant bombings also changed attitudes, because civilians helped each other construct shelters and would check to see if families needed help after a raid. In Britain, a community spirit developed; a mentality whereby everyone helped each other. This attitude continued after the war and resulted in new laws being passed.

How does COVID-19 compare?

Baby Boom

We don’t have returning veterans, but we do have quarantine. Will this cause a spike in births in 9 months’ time or more divorces? 

Rationing

We have seen the worst face of society during COVID-19. Violence, abuse and hoarding. Selfish behaviours that has restricted essentials from those most vulnerable in society. However, this behaviour appears to represent a minority as most people appear angered and disappointed by it. Australia is self-defined by ‘mate-ship’, which we all saw during the recent bush-fires. However, this image has been dented by YouTube clips of people fighting over toilet roll. 

Trade agreements 

This is a massive question. China appears to be recovering first and will be manufacturing and trading fully before the rest of the world. As if they didn’t have enough of a foothold already, the head start will no doubt have significant impacts on trade agreements. Then you need to factor in the ‘Buy from Home’ movements. It’s already happening in the call to support local businesses. Will the consumer trend scupper the head start that has been created by China?

Social levelling

The welfare state differs from country to country, but exists to keep everyone’s heads above water. Spain, for example, is now in talks to introduce a long-term set wage for everyone – regardless of circumstances. Despite examples like this, I don’t think we will see too much social levelling compared to WWII as the welfare state is already here. There will be tweaks and learning's actioned though. Therefore, society may (in the long term) come out the better for it.

Workplace

In this case, the biggest shift has been in remote working and the division of essential and non-essential staff. Working remotely has many benefits, such as saving on office costs. However, employers have always been cautious towards this, primarily due to productivity reasons and IP security. Now their hands have been forced they will have found that IT is – in most respects – able to facilitate remote working Plus, in some cases productivity has increased. Does this give them the green-light to move to this model? I’m not sure, as people may be performing mainly to keep their job. Employers will likely revert to what they know. Plus, there will be many cases where workers are simply spotted on the beach instead of working. Working remotely is not for everyone or every role. A vetting to decipher who this would work for would be a great idea. Also defining yourself as non-essential is a bit of an eye opener for some. There will be unsettling consequences from this.

Spending

Spending has increased in some areas and not others. Retail is all online now. Food delivery has gone through the roof. Many shops, cafes and businesses have closed their doors already. These are sudden, significant and circumstantial changes. However, will there be an increase thereafter? It all really depends on the economy. Will people get their jobs back and at the rate they were paid? Will we enter a recession or not? The first sign of a recession is no spending on the leisure industry and property. Therefore, if we enter a recession, surely spending in this case will slow down overall? 

Community Culture 

We have not been on the receiving end of bombs, but there have been many heart-warming gestures and movements out there. There are many cases where people locally are chipping in to help those in their neighbourhood by doing grocery shopping and picking up prescriptions. It is still there in society and it appears that in all tough times the right people stand up to do the right thing for those that need it. 

More changes from the NORM…………

Social distancing 

There isn’t really a comparison in WWII unless you include evacuations. It’s taken some getting used to. Many, frustratingly, are still breaking the rules, with little thought of the consequences of others. Overall, though, it’s being respected. Will it have a long-term effect? I doubt it, but personally, I quite like it. 

Real estate 

With stretched tenants, no tourism, redundancies and wage cuts, there will be a short-term effect, for sure. How bad it will be and how long are the main questions? Sydney, for example, has been out of reach for most first home buyers for some time. Maybe there will be a re-alignment with salaries and society? 

Wages

If you’re lucky enough to have kept your job, there is a chance you’ll have received a pay cut. Companies did not see this coming. All budgets are miles off where they were planned to be. Companies can only look at necessity; at what things are costing. Damage limitation is the initial goal, with the option of pivoting to get back on track. Will the jobs come back? If they do, will employers pay the original wages or the new ones? I guess much of that depends on supply and demand. If this is the case, it’s not looking good for employees.

Appreciation

Millennial's are often labelled as the generation that takes everything for granted. They have an expectation of things being given to them and hold little value towards those things. This is exactly the type of situation that can change this attitude. Having some basic freedoms restricted will undoubtedly affect this mindset.

In the UK, there has been national applause for the NHS. Nurses are deemed the new Superheroes, just as the firefighters were here in Australia. The individuals that are looking after us in a crisis – even simple things like keeping the supermarkets stocked – are in the public eye. What they do directly affects us. There is now a greater appreciation for things that we as a society took for granted prior to COVID-19. This is welcome news, as many of the millennial's will probably have plastic taken away from their resources in their lifetime too.

Xenophobia

There is a risk that this could get worse. There have already been pockets of problems and finger pointing. The problem has a source, for sure, and there is no hiding from that. China is responsible Will it continue to incubate and encourage xenophobia? If countries and organisations go to take action, such as legal for damages, then I fear this could get very bad as it would appear to endorse this thought process. 

Super and retirement 

One of the contingency plans is allowing people to dip into their Super a couple of times if they need too. Even Landlords have had a slap on the wrist for suggesting tenants pay their rent from their Super. The longer COVID-19 goes on the more likely this is people’s only option. This will have a long-term knock-on effect, for sure. Super is mathematically less likely to be enough to support a healthy retirement, so if we dent this further, it will necessitate a reform of the whole system. 

Contempt 

It appears that everyone is pulling together to make sure we get through this together. However, there are many examples where there has been nothing or very little done to help. Banks are the most prominent of them. Mortgages go through them, and thus landlords and tenants are suffering. Federal and State Governments could facilitate change by forcing the banks’ hands, but they haven’t done so. This could result in long-term contempt – for the system, organisations and political parties. When everyone is coming together to get through this, it needs to be everyone. 

Recession

There was a lot of talk of a recession in Australia before COVID-19. It would appear that it’s not a case of ‘if’, but rather ‘when’. COVID-19 has made a massive dent in government funds. Businesses have closed and it will be much longer before we can get back on our feet. This is without factoring in the worldwide effect from economically damaged trade partners, especially if their own citizens are forcing them to buy local. Add to this all the closed borders – Internationally and domestically – and its profound effects on tourism. How will the recession interlay with all the above factors? Only time will tell.

The COVID-19 pandemic is a once-in-a-hundred years event. It’s a tale of despair and death, selfishness and fake news, balanced by heroism, altruism and stoicism. As nations start to overcome the first wave, there are little glimpses of a silver lining, too.

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